May 31, 2011

Will Sarah Palin, Congressman Paul Ryan or Newt go under the bus? This is quite a polemic for our Republican brethren that have always made hay on their brilliant use of language while we Dems contemplated our sleepy intellectualism. Perhaps finally in the aftermath of the failed assassination attempt on Congresswoman Gabby Giffords, the President's irrefutable victories, and the Arab spring -- maybe the forces have finally aligned for the Democrats together with social media to counter balance the megaphone of the Right wing propaganda.

Given that language and propaganda are not working, who will be the first to be thrown under the bus for the greater good of the Republican Party? Will it be Sarah our old pal from the McCain campaign that has built a $25M industry around her 2008 candidacy to the chagrin of the Party elders? Or will it be the "real" Palin appropriately coined as such by the supporters of Michelle Bachman on national television? Or have the women folk run their course in Republican Land? And if so has the time come to "man-up" with a few good, old white conservative male Governors from Conservativeville - like Tim Pawlenty or Jon Huntsman? Or better yet will it be Newt who inappropriately danced on the head of Congressman Paul Ryan and his budget plan -- only to refute it later? Sadly, for the Republicans all of this is off putting for guys like Mitt, or even Governor Chris Christie that appeal to the moderates of both parties.

Admittedly, any candidate, male or female, needs the proverbial brass cajoles, or other such accoutrements to challenge this sitting President after the take down of Osama bin Laden. This factoid together with Obama's recent tough stance on the Middle East clearly levels the playing field. The scare tactics of the past cannot work at this rodeo particularly when bundled with the wholesale lunacy of the Republican leadership on the debt ceiling, Medicare and the budget. Vice President Biden in an LA Times piece summarizes well when referring to the Osama take-down as a "defining moment" for the Obama presidency. Certainly, this together with the broken Republican message machine is having an impact. Terms like "Mediscare" are not getting the same kind of traction as "ObamaCare" did just last year, or the coinage of the term "entitlement" used to pollute a whole generations' thinking on Medicare and Social Security. Of course, Newt and his merry gang of language shapers keep trying to spin, but it is not sticking. Maybe in Newt's case, folks have had enough of those that behave badly, pander family values, but live on the edge of exorbitant wealth. For him it appears that there is just no way to explain away things like the Tiffany's account to the Middle Class. Further is there now cause to wonder if the day has come for Sarah, sweet Sarah, who walks the walk on reality television, but lives shall we say in Palin vernacular, high off the hog.

Indeed, the President and the Party are on the right side of the budget, Medicare, Social Security, national security, jobs and climate change. But can he and the Dems maintain this momentum when the banks, remember those pesky money men, continue to behave poorly. The reality is that folks are as fed up with these fat cats as they are with the empty threats of Right wing rhetoric and the bad behavior of men of a certain age and power whether they represent Hollywood, government or international politics.

Note to the Democratic Party: clean up the banks, the bankers and all of the bad behavior of their ilk and 2012 is a shoe-in, and maybe even 2016. Let's think like Republicans and chart the waters for the next eight years.

The House is voting on a “clean” debt ceiling bill today -- a bill to raise the debt ceiling without any "hostage-taking" conditions. This is the right thing to do for the country and every Democrat should vote for this. Voting for a clean bill will draw the contrast for the public between those who are doing the right thing, and those willing to hold the world's economy hostage to a make-the-rich-richer plutocracy agenda. Democrats who do not vote for a clean bill should lose committee assignments, parking places, even bathroom keys.

The Debt Ceiling

The country's "debt ceiling" has been reached. This means that the government's authority to borrow money has reached its limit. The Treasury Department is engaging in gimmicks and schemes to keep the country going but time is running out. The Congress must extend this limit, or the government will default on its bonds.

If our government defaults on its bonds it would initiate a worldwide financial crisis that dwarfs the Wall Street meltdown of a few years ago.

WHY We Have This Debt

In 1981 the Reagan administration dramatically changed the course of the country. They defunded government by passing huge tax cuts for the rich and massively increasing military spending, and began cutting back on the things We, the People (government) do for each other. The country cut back on maintaining -- never mind modernizing -- our infrastructure, our schools, colleges and universities, scientific research and other things that make us competitive in world markets. We began cashing in our factories and moving the jobs out of the country. As a result of Reagan-era changes our trade deficits soared, wages stagnated, pensions disappeared, and a few extremely wealthy started getting much, much richer.

One major result of these changes, of course, was the huge budget deficits that accumulated into today's massive debt. This was the plan from the start, to "starve the beast" by defunding government and forcing the debt to reach a level where there was no choice but to cut back on democratic government's protections for the people, unleashing plutocracy.

Hostage-Taking Enabled: The Tax Cut Extension

This debate over the debt ceiling and hostage-taking follows the recent extension of the Bush tax cuts -- another product of hostage-taking. At the end of the last Congress unemployment benefits for the millions of unemployed were running out. Republicans -- having filibustered much of the legislation of the prior two years -- held the extension of benefits "hostage" saying they would not let it pass unless the deficit-creating Bush tax cuts were extended.

Enough Democrats caved and passed an extension of the Bush tax cuts. This validated hostage-taking as a successful tactic while making the deficit much worse, setting the stage for today's debt-ceiling fight.

The Vote Is A Trick

Today's vote has been scheduled by the Republican leadership as a trap, trying to get some Democrats to vote with Republicans to support their hostage-taking agenda and create the appearance of bipartisan support for plutocracy. If the Republican position gets the support of enough Democratic members, Republicans can then demand deep cuts in Medicare and other programs that help people and hold corporate power in check, in exchange for their votes to allow the world's economy to continue to operate.

The vote is intended to expose fault lines within the Democratic caucus, with Republicans counting on sizable number of Democrats to side with them and bolster their case that Democrats need to agree to deep spending cuts as a condition to raising the debt limit.

Vote For A Clean Debt-Ceiling Bill

Voting for a clean bill stops government-by-hostage-in its tracks. Voting for a clean bill saves the world's economy. Voting for a clean bill fights the plutocracy agenda. Voting for a clean bill saves Medicare, Social Security and the things We, the People do for each other. Voting for a clean bill is the right thing to do and doing the right thing is the right thing politically.

Call your member of Congress NOW and demand a vote for a clean debt-ceiling bill.

May 26, 2011

Republicans announced something they called a "jobs plan" today. This time it's different. It really is. This time it really will create jobs instead of just handing even more money to a few at the top at the expense of the rest of us. You might not believe this because Republicans sell everything by calling it a jobs plan. And what they sell is always tax cuts for the wealthy while cutting the things We, the People do for each other. And it always ends up messing everything up for most of us. But this time it's different.

But This Time It's Different

Republicans always offer something called a "jobs plan" and the plan is always tax cuts for the rich while gutting the things We, the People -- a.k.a. government -- do for each other. Their "jobs plans" always end up enriching the already-wealthy while messing things up really bad for us.

But this time is different because this time they actually offered something that is called a "jobs plan." So there you go! And this time the plan is different because this time the plan is to cut taxes for the wealthy and giant corporations, cut government protections for working people and the environment, but also opening our borders to let in goods made in countries unhampered by democracy's protections while cutting taxes on companies that offshore jobs. So Bob's your uncle.

It will work. Republicans always promise their plan will work, and then it messes things up for most of us, but this time it's different because this time they say the plan will work. So this time it is different.

The "Plan"

You can look over the official Republican job plan here (PDF): The Republican Plan for America’s Job Creators. Here is a summary of the points: (summary: cut taxes for the rich, cut the things We, the People do for each other, send factories out of the country.)

But this time the plan is to cut taxes for the rich, cut the things We, the People do for each other and send more factories out of the country. This time it's different from those other plans to cut taxes for the rich, cut the things We, the People do for each other and send more factories out of the country.

The Name Is The Game

It's all in the name. Republicans think giving a plan a name is what matters, no matter what the plan actually does. Say whatever you need to say, but do what you wanted to do all along. They believe that people will be fooled into thinking something does a certain thing because the name says that is what it does, regardless of the actual details and results. For example, their budget plan cuts government "costs" by eliminating Medicare and replacing it with something entirely different, but since it is still named "Medicare" it still is Medicare.

So today they are recycling the usual stuff and naming it a "jobs plan," are we are supposed to think therefore it means it is a plan that will create jobs. But really, it means sending even more money to a few at the top at the expense of the rest of us and of our country’s future.

We are living through the nightmare that resulted. Worldwide financial collapse. Tens of thousands of American factories closed. Millions of jobs lost. Millions of lost homes. Wars. Climate change unaddressed and worse. Terrible concentration of income and wealth. Terrible trade deficits. Terrible debt. Pensions gone, savings gone, heath care benefits gone, government rampantly corrupt, unprosecuted corporate fraud common, oil spills, mountaintops removed, miners killed ... a terrible, terrible list of bad results that just goes on and on and on and on and on...

Some Republicans fervently believe that doing these things will help, but the rest of them understand exactly what they are doing. These are not stupid people, and all you have to do is look around to see what actually happens in the real world when you do these things. They do them precisely because these are the results.

The Party Of Wall Street And Billionaires

Here is a fact: today when you hear from Republicans you are hearing from Wall Street, giant oil companies, huge multinational firms and a few billionaires, period. OK, maybe you also get a dose of religious right with your tax cuts, but really they just say that stuff to get those votes, too, but what they actually do is tax cuts and policies that enrich the already-wealthy at the expense of the rest of us. And the things they do always mess everything up.

In 2010 Republicans and corporate front groups ran ad after ad after ad after ad claiming that Democrats had "Cut 500 billion from Medicare." Those ads brought them the senior vote, and they took the House. Confident in their ability to "create their own reality" they came out with a plan to privatize Medicare and told the public it would save Medicare. Well, last night's win by Kathy Hochul in the NY-26 special election -- with pretty high turnout in a Republican district -- shows that the American people are smarter than they look, and figured out what was what. The lesson: don't mess with Medicare.

Soundly Defeated

Yesterday's NY-26 Congressional election turned on Medicare and the candidate who supported Medicare won. The candidate who supported the Republican plan to privatize Medicare was soundly defeated.

House Republicans voted to change Medicare from a single-payer plan to a private-insurance voucher plan as a measure to "cut government spending." Republicans had talked themselves into believing the public hates government as much as they do and therefore gutting it is what the public wants. Instead of working to control health care costs they just shifted those costs away from the government into "personal responsibility" land. In plain non-propagandized English personal responsibility means each of us on our own, alone, instead of all of us watching out for and taking care of each other.

The public figured it out and voted to keep the Medicare-gutter out.

American Majority

The American Majority understands what is going on. They know that our budget problems come from tax cuts, military spending and the lack of jobs. Those are the things the public wants the Congress to fix.

70% oppose cuts/changes to the Medicare system as described in the House Republican Budget.

49% support not reducing funds to Medicare.

53% believe replacing the current Medicare program with a voucher system in which retirees will receive vouchers to use to purchase subsidized insurance from private insurance companies for those 55 or older is totally or mostly unacceptable.

Those polls don't just test public support for Medicare, they test support for Social Security as well. The public feels just as strongly that politicians had best keep their hands off our Social Security.

In order to reduce the national debt, would you support or oppose cutting spending on Social Security, which is the retirement program for the elderly?
Ohio: 16% support, 80% oppose
Missouri: 17% support, 76% oppose
Montana: 20% support, 76% oppose
Minnesota: 23% support, 72% oppose

Reality Restored

During the Bush years the idea of a "reality-based community" circulated after an article by Ron Suskind about a meeting he had with "a senior advisor to Bush." In the article he described how the aide scoffed at people who bother with reality:

The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."

Republicans and their corporate money tried to create a reality that let them gut Medicare without the public rising up to do something about it. It didn't work.

Do The Right Thing

Well, reality is coming back. The public is figuring things out. Politicians should learn the lesson of NY-26: don't mess with Medicare -- or Social Security. To fix the deficit fix the causes of the deficit: invest in jobs through maintaining and modernizing our infrastructure, restore top tax rates to where they were before we had huge deficits and, by the way, the Soviet Union is long gone so cut military spending back to maybe only twice our nearest potential competitor.

In DC the elite are gathered around tables discussing budget cuts but not jobs to cure a deficit largely caused by a lack of jobs and by tax cuts. The last time these DC geniuses gathered around tables they extended tax cuts for the wealthy, dramatically worsening the deficits that are causing their fainting spells today. Not at the table: women, working people, the poor or any semblance of democracy.

Just ten years ago the country had huge budget surpluses. Then they cut taxes for the rich and dramatically increased military spending. They privatized (i.e. handed to cronies) as much of the government as they could get away with. They deregulated almost everything and stopped enforcing the laws and regulations that remained. They closed 50,000 factories, sending millions of jobs out of the country. This all came to a head, as it had to, and millions more jobs were lost, which exploded the already-huge deficits as unemployment, food stamps, etc. increased while tax revenues declined.

Now there is a deficit of jobs, causing the deficit of budget. At the same time there are millions of jobs that obviously need to be done, maintaining and modernizing our infrastructure, educating our people, moving us away from oil and coal and otherwise improving our health and our lives and out spirits. But these are not the issues being discussed at the table.

Wealthy And Wall Street At The Table

These negotiations going on behind the scenes do not represent the public.

Remember the deficit commission that was headed by a right-wingnut and a board member of a huge Wall Street firm? The two of them came up with a "serious" plan that cut taxes for the rich and cut the things government does for the rest of us.

Then there was a "Gang of 6" (now 5). Now there is the Biden Group described (see below) as an "Old Boys Club."

Women are not at the table -- especially not single mothers or older women. Working people are not at the table. The poor are not at the table. The retired are not at the table. The unemployed are not at the table. The open, transparent and accountable processes required by democracy are not at the table.

“It is simply not enough to send a few privileged men to the table to ‘solve’ the nation’s budget problem,” states the letter from the OWES Task Force. “We welcome the opportunity to bring our voices and expertise to a discussion with you and your advisors, and we request that members of your administration with expertise on women’s issues, such as Secretary Hilda Solis and Secretary Kathleen Sebelius, be added to the White House’s advisory team working on these negotiations.”

The elite media say that the only "serious" approach to deficits is to cut back on the things We, the People (government) do for each other -- budget cuts. Tax increases on the wealthy, taking rates back to where they were when we didn't have these problems -- that's not "serious." Investing in modernizing infrastructure, educating our people and efficient energy so our economy is more competitive is not "serious." Taking on mercantilist trading partners who are grabbing jobs and markets is not "serious." The People's Budget especially is not "serious."

The People And Democracy Demand To Be At The Table

A new round of polls is out, and the public is demanding a change in the DC elite approach. Even more than the last round of polls, these polls show that the public demands to be at the table.

The National Labor Relations Board is attempting to enforce our country's laws and the corporate conservatives are going nuts - literally. They are challenging the concept of law itself, while making wild claims of conspiracies by government against business itself. Yikes!

The National Labor Relations Board has filed a complaint against Boeing for retaliating against employees for legitimate union activities. Boeing opened a 787 assembly line in "right-to-work" South Carolina that they had previously stated would go to Washington State, after repeatedly having to grant concessions to union workers in Washington State. Opening an assembly line is not illegal, of course, but doing so in retaliation for union activities or for the purpose of threatening a union is illegal.

The key to the NLRB action is that Boeing executives said repeatedly they were opening the South Carolina plant because of union activities. They boasted they were breaking the law, and finally someone has dared to enforce the law.

The International Associaltion of Machinists and Aerospace Workers complaint states that a Boeing executive stated Boeing was "diversifying Boeing's labor pool" to South Carolina due to "strikes happening every three to four years." The complaint cites several other instances of Boeing officials stating the reason for opening the South Carolina assembly line was because of union activities, as well as threatening the union with losing work in Washington state because of union activities.

Yes, exactly. That is what law is: government dictating private business decisions.

What Is Law?

Law is "government dictating private business decisions." That's pretty much the definition of what law is. Telling a company they can't dump toxic waste into rivers, can't steal from customers, etc. are all examples of "government dictating private business decisions."

Law is government -- We, the People -- telling people and companies what they can and cannot do. So by complaining about "government dictating private business decisions" it appears the Boeing and the corporate right have a problem with law and government itself. "Being told what they can and cannot do" is what government and law enforcement are for.

The right to form a union and engage in legitimate union activities without fear of retaliation or intimidation is the law in the US, and in every state.

This is now about integrity of the law enforcement process. Boeing and the corporate right are attacking law enforcement itself. And so we are treated with the spectacle of the lawbreakers getting headlines attacking the law-enforcement agency.

This crowd has gotten used to telling government what to do, and now here comes government actually daring to try to enforce a law -- telling them what to do instead of the other way around -- and they just can't f&%king believe it! They clearly do not accept it.

What The Law Is

Congress enacted the National Labor Relations Act (“NLRA”) in 1935. It’s the law.

Take a look at Section 1 of the NLRA. In summary, it says that lack of bargaining power by workers against corporations leads to Depressions (we call them recessions now) because of depressed purchasing power. And it leads to strikes, which disrupt commerce. Therefore, it is the policy of the United States to encourage collective bargaining.

Bargain collectively for a contract that sets wages, benefits, hours, and other working conditions

Discuss wages, working conditions or union organizing with co-workers or a union

Act with co-workers to improve working conditions by raising complaints with an employer or a government agency

Strike and picket their employer, depending on the purpose or means of the action

Choose not to join a union or engage in union activities

Organize coworkers to decertify a union
If employees choose a union as their bargaining representative, the union and employer must bargain in good faith in a genuine effort to reach a binding agreement setting out terms and conditions of employment. The union is required to fairly represent employees in bargaining and enforcing the agreement.

Employers may not:

Prohibit employees from discussing a union during non-work time, or from distributing union literature during non-work time in non-work areas, such as parking lots or break rooms

Question employees about their union support or activities in a manner that discourages them from engaging in that activity

Fire, demote, transfer, reduce hours or take other adverse action against employees who join or support a union or act with co-workers for mutual aid and protection, or who refuse to engage in such activity

Threaten to close their workplace if employees form or join a union

Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support

Prohibit employees from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances

Spy on or videotape peaceful union activities and gatherings

Companies can not threated employees for trying to form a union, and companies cannot retaliate against employees for having a union. That. Is. The. Law.

Corporate Right Going Nuts

The big corporations have gotten used to having things their way. In response to having their unquestioned authority over government and law itself challenged by this NLRB action the corporate right is apoplectic.

Not only is the corporate right challenging the very idea of law itself, complaining about "government dictating private business decisions," but they are doubling down on the nutty stuff. The Heritage Foundation, in NLRB Comes to Big Labor’s Defense, for example, goes off the deep end, into Glenn Beck territory, claiming that the NLRB is engaged in a conspiracy to make companies "even harder to manage."

The Washington Examiner reports that a leaked NLRB memo “makes clear that President Obama and the radical labor advocates he put on it are embarked on a calculated campaign to make unionized firms even harder to manage.” The memo, which was obtained by the Heritage Foundation’s Hans von Spakovsky and James Sherk, “shows that the board seeks to elevate union officials to equal partners with executives in corporate boardrooms of all unionized firms.” The Examiner continues:

The memo instructs NLRB regional operatives to flag all cases in which unionized firms made relocation decisions without submitting detailed economic justifications to their unions. The board plans “case-by-case” reviews, followed by prosecutions of selected cases. The intended consequence is that all major business decisions will become subject to approval by unions.

Nutty, indeed, claiming that there is a conspiracy by government that has "embarked on a calculated campaign to make unionized firms even harder to manage.” That's Glenn Beck territory.

Who Is In Charge?

This comes down to a simple question: who is in charge here? Is it We, the People, or the giant corporations who consider themselves above the law, and in control of the government?

Austerity -- cutting government benefits and services -- is not the path to fixing deficits. In fact, economists warn that trying to fix a sluggish economy by cutting government spending will just make things worse. Worse yet, this approach can have damaging effects that last into the future. This can be easily shown with simple calculations.

Suppose we are in a country that is running a large budget deficit but, for whatever reason, decides that it needs to dramatically reduce it. Take your pick of examples, because there are plenty to choose from: Greece, the UK, the US...

Suppose that the country – let’s call it Austerityland – has a GDP of $100/year, and a budget deficit of $10/yr, or 10% of GDP. And suppose that the government decides it wants to get the deficit down to 5% of GDP. How can it get there?

No, the answer is not “cut spending by $5/yr”.

OK, so we have a $100 GDP with $10 deficits and we want to cut that to $5. Kash explains that a $5 spending cut means (by definition) that GDP immediately drops $5, and this (by definition) $5 drop in consumer income makes tax revenue drop as well (as well as a further drop in GDP). After some calculations (go to the post) Kash shows that a $5 cut makes deficits drop to 7.4%, not 5%, but GDP also drops quite a bit - maybe 7 or 8%. Seriously, go see the calculations, they are not difficult.

So much of our current deficit is because of the Great Recession. Obviously we don't want to force the economy back into recession with budget cuts causing a big drop in GDP!

(Note, if this spending cut happens at a time when interest rates are high, then the rates might fall as spending cuts reduce demand, which might help spur investment, but in the US interest rates are zero so this won't happen. The only thing that will happen is demand is reduced and the economy slows.)

Kash concludes,

Why do people keep getting surprised that austerity doesn't work as well as hoped to reach budget deficit targets? ...

But when basic Macro 101 both makes good theoretical sense and also fits what we actually observe, it's really time to start looking for your handy Occam's Razor.

In the UK we observe that this effect is now proven as their austerity has forced a big drop in GDP. And the same is happening with Greece as their austerity forces their economy to slow.

But Wait, It Gets Worse

After linking to this post DeLong takes the warning a bit further, pointing out that if some of the "austerity-induced output decline turns into a permanent reduction in potential output" then the "spending cuts this year lowers future annual tax collections..." which means it hurts your ability to pay off debt. Or, in other words, "that austerity today worsens the debt burden." Click through to see DeLong's calculations.

Got that? Harming the economy on purpose with spending cuts harms the economy in the future, too.

May 22, 2011

The Senate Republican minority has publicly announced it will filibuster any nominee to the Consumer Financial Protection Bureau, unless the President strips the new bureau of much of his ability to protect consumers and hold banks accountable. If Senate Republicans are going to unreasonably withhold their votes, the President has no obligation to cater to their demands. He can use his constitutional powers to make appointments while Congress is in recess after May 27, and nominate the best person for the job.

Sign the petition below to urge the President to appoint the best: Elizabeth Warren.

We the undersigned urge you, President Barack Obama, to use your recess appointment powers, after the Senate adjourns on May 27, to name Elizabeth Warren to lead the Consumer Financial Protection Bureau. Since the Senate Republicans have refused to consider any appointment without dismantling the bureau itself, there is no reason to subject any nominee to a confirmation process guaranteed to go nowhere.

Elizabeth Warren is American's greatest middle-class champion. She has done outstanding work in setting up the bureau. We cannot let Wall Street opposition and Republican obstruction block dynamic leadership for the new bureau.

We in the middle-class need the best, and the best is Elizabeth Warren. It is time to act.

Then join our campaign to push Koch money out and bring democracy back in - sign up below to join The Other 98% as we fight Koch money wherever it shows up - and maybe take part in some more awesome creative agitation."

After all these years, all these miles and all the suspicion, it's still somewhat astonishing to see the cars on the old Blue Train uncoupling one by one. This may forever be remembered as the week when Lance Armstrong finally lost control over the U.S. Postal Service cycling team that formally disbanded years ago.

One of Armstrong's most prominent support riders from early on in his seven-year reign as Tour de France champion, Tyler Hamilton, admitted to his own doping past and has given the CBS newsmagazine "60 Minutes" an alleged eyewitness account of Armstrong using performance-enhancing drugs that will air on Sunday evening.

When will this country start enforcing laws again? We even let torture and illegally invading a country slide. Never mind enforcing mine safety, food inspection, labor, age-discrimination, bank fraud...

LinkedIn went public this week and the price per share immediately doubled and more. This means LinkedIn was scammed by the Wall Street firms they hired to take them public. These firms scammed them by intentionally underpricing the stock, so instead of all the money going to the company, a ton of money went to the people that Wall Street firms had let in on the early lower-priced shares.

The stock more than doubled, which means that these firms got more for themselves and insiders they set up than for the company.

The fact that the stock immediately doubled in price means the Wall Street firms were either grossly incompetent (and they aren't), costing the company something like $350 million, or they are corrupt thieves.

This is corruption, plain and simple. It's what our country is becoming known for.

Technically, the federal government has now reached the limit of its capacity to borrow money.

Raising the debt ceiling used to be a technical adjustment, made almost automatically. Now it’s a political football.

Democrats should never have agreed to linking it to an agreement on the long-term budget deficit.

But, being the Democrats we have come to know and love, they did, and here we are. Where can we go from here?

We can reduce the long-term budget deficit, keep everything Americans truly depend on, and also increase spending on education and infrastructure — by cutting unnecessary military expenditures, ending corporate welfare, and raising taxes on the rich.

I commend to you the “People’s Budget,” a detailed plan for doing exactly this – while reducing the long-term budget deficit more than either the Republican’s or the President’s plan does. When I read through the People’s Budget my first thought was how modest and reasonable it is.

A reasonable budget that would have been called "centrist" not long ago. The public supports the approach.

The message from the “People’s Party” should be unconditional: No cuts in Medicare and Medicaid or Social Security. More spending on education and infrastructure. Pay for it and reduce the long-term budget deficit by cutting military spending and raising taxes on the rich. The People’s Budget is the template.

Reich said it all for me...

The People's Budget

The Progressive Caucus -- a group of progressives in the Congress -- have put together a budget that fixes the deficit and grows the economy, providing jobs. It is called The PEOPLE'S Budget Plan.

• Eliminates the deficits and creates a surplus by 2021
• Puts America back to work with a “Make it in America” jobs program
• Protects the social safety net
• Ends the wars in Afghanistan and Iraq
• Is FAIR (Fixing America’s Inequality Responsibly)

What the proposal accomplishes:

• Primary budget balance by 2014.
• Budget surplus by 2021.
• Reduces public debt as a share of GDP to 64.1% by 2021, down 16.5 percentage points from a baseline fully adjusted for both the doc fix and the AMT patch.
• Reduces deficits by $5.6 trillion over 2012-21, relative to this adjusted baseline.
• Outlays equal to 22.2% of GDP and revenue equal 22.3% of GDP by 2021.

Budgets are more than collections of numbers. They are a statement of our values. The Congressional Progressive Caucus Budget is a reflection of the values and priorities of America's working families. The "People's Budget" charts a path that keeps America exceptional in the 21st century, while addressing the most pressing problems facing the nation today. Our Budget eliminates the deficit, stabilizes the debt, puts Americans back to work, and restores our economic competiveness.

[. . .]

Our Budget listens to what the American people are telling us. It does all of the above in a fiscally responsible way that dramatically reduces our borrowing from banks and foreign governments and ensures our long-term economic competitiveness.
...Our Budget Eliminates the Deficit by 2021: The CPC budget eliminates the deficit in a way that does not devastate what Americans want preserved, specifically, Medicare, Medicaid and Social Security. ...

Our Budget Puts America Back to Work & Restores America's Competitiveness: The CPC budget rebuilds America and makes it competitive again. We put America back to work. We rebuild our roads and bridges, ensuring that those who use it help pay for it. ...

Our Budget's Fair Tax System: The CPC budget implements a fair tax system, based on the American notion that fairness and equality are integral to our society. ...

Our Budget Brings Our Troops Home: The CPC budget responsibly ends our wars, currently paid for by American taxpayer dollars we do not have. ...

You think we have a debt crisis now? You should have seen the one Canada had in 1993!!! And just like this one, it was phony, designed to scare people into cutting and privatizing government so the rich can get even richer.

The following is from The Shock Doctrine, Naomi Klein, Picador, Pages 324-326. This book was published before the financial collapse, and subsequent "debt crisis." (All emphasis added.)

-----

In February 1993, Canada was in the midst of financial catastrophe, or so one would have concluded by reading the newspapers and watching TV. “Debt Crisis Looms,” screamed a banner front-page headline in the national newspaper, the Globe and Mail. A major national television special reported that “economists are predicting that sometime in the next year, maybe two years, the deputy minister of finance is going to walk into cabinet and announce that Canada’s credit has run out…. Our lives will change dramatically.

The phrase “debt wall” suddenly entered the vocabulary. What it meant was that, although life seemed comfortable and peaceful now, Canada was spending so far beyond its means that, very soon, powerful Wall Street firms like Moody’s and Standard and Poor’s would downgrade our national credit rating from its perfect Triple A status to something much lower. When that happened, hypermobile investors, liberated by the new rules of globalisation and free trade, would simply pull their money from Canada and take it somewhere safer. The only solution, we were told, was to radically cut spending on such programs as unemployment insurance and health care. Sure enough, the governing Liberal Party did just that, despite having just been elected on a platform of job creation.

Two years after the deficit hysteria peaked, the investigative journalist Linda McQuaig definitively exposed that a sense of crisis had been carefully stoked and manipulated by a handful of think tanks funded by the largest banks and corporations in Canada, particularly the C. D. Howe Institute and the Fraser Institute (which Milton Friedman had always actively and strongly supported). Canada did have a deficit problem, but it wasn’t caused by spending on unemployment insurance and other social programs. According to Statistics Canada, it was caused by high interest rates, which exploded the worth of the debt much as the Volcker Shock had ballooned the developing world’s debt in the eighties. McQuaig went to Moody’s Wall Street head office and spoke with Vincent Truglia, the senior analyst in charge of issuing Canada’s credit rating. He told her something remarkable: that he had come under constant pressure from Canadian corporate executives and bankers to issue damning reports about the country’s finances, something he refused to do because he considered Canada an excellent, stable investment. “It’s the only country that I handle where, usually, nationals from that country want the country downgraded even more – on a regular basis. They think it’s rated too highly.” He said he was used to getting calls from country representatives telling him he had issued too low a rating. “But Canadians usually, if anything, disparage their country far more than foreigners do.”

That’s because, for the Canadian financial community, the “deficit crisis” was a critical weapon in a pitched political battle. At the time Truglia was getting those strange calls, a major campaign was afoot to push the government to lower taxes by cutting spending on social programs such as health and education. Since these programs are supported by an overwhelming majority of Canadians, the only way the cuts could be justified was if the alternative was national economic collapse – a full blown crisis. The fact that Moody’s kept giving Canada the highest possible bond rating – the equivalent of an A++ – was making it extremely difficult to maintain the apocalyptic mood.

Investors, meanwhile, were getting confused by the mixed messages. Moody’s was upbeat about Canada, but the Canadian press constantly presented the national finances as catastrophic. Truglia got so fed up with the politicised statistics coming out of Canada, which he felt were calling his own research into question, that he took the extraordinary step of issuing a “special commentary” clarifying that Canada’s spending was “not out of control,” and he even aimed some veiled shots at the dodgy math practiced by right-wing think tanks. “Several recently published reports have grossly exaggerated Canada’s fiscal debt position. Some of them have double counted numbers, while others have made inappropriate international comparisons… These inaccurate measurements may have played a role in exaggerated evaluations of the severity of Canada’s debt problems.” With Moody’s special report, word was out that there was no looming “debt wall” – and Canada’s business community was not pleased. Truglia says that when he put out the commentary, “one Canadian… from a very large financial institution in Canada called me up on the telephone screaming at me, literally screaming at me. That was unique.”

By the time Canadians learned that the “deficit crisis” had been grossly manipulated by the corporate-funded think tanks, it hardly mattered – the budget cuts had already been made and locked in. As a direct result, social programs for the country’s unemployed were radically eroded and have never recovered, despite many subsequent surplus budgets. The crisis strategy was used again and again in this period. In September 1995, a video was leaked to the Canadian press of John Snobelen, Ontario’s minister of education, telling a closed-door meeting of civil servants that before cuts to education and other unpopular reforms could be announced, a climate of panic needed to be created by leaking information that painted a more dire picture than he “would be inclined to talk about”. He called it “creating a useful crisis.”

-----

This story of financial interests creating a phony crisis to scare people into cutting and privatizing government is from the book The Shock Doctrine: The Rise of Disaster Capitalism. If you want to understand what is happening to us today, you must read this book. (read more here)

"The best way to stay oriented, to resist shock, is to know what is happening to you and why."

"Nothing is more important in the face of war than cutting taxes" - Tom DeLay, 2003

May 13, 2011

There's only one deficit reduction proposal clearly backed by the American majority: the "People's Budget" from the Congressional Progressive Caucus. Yet none of the authors of the "People's Budget" are currently part of the White House-led bipartisan budget negotiations. The Progressive Caucus has just written a letter to President Obama asking to be part of the budget talks. Now the President needs to hear from the rest of us in the American majority. Use the form below to send a letter to the President, saying "Put the People's Budget on the Table."

You hear it again and again, variation after variation on a core message: if you tax rich people it kills jobs. You hear about "job-killing tax hikes," or that "taxing the rich hurts jobs," "taxes kill jobs," "taxes take money out of the economy, "if you tax the rich they won't be able to provide jobs." ... on and on it goes. So do we really depend on "the rich" to "create" jobs? Or do jobs get created when they fill a need?

Here is a recent typical example, Obama Touts Job-Killing Tax Plan, written by a "senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth,"

Some people, in their pursuit of profit, benefit their fellow humans by creating new or better goods and services, and then by employing others. We call such people entrepreneurs and productive workers.

Others are parasites who suck the blood and energy away from the productive. Such people are most often found in government.

Perhaps the most vivid description of what happens to a society where the parasites become so numerous and powerful that they destroy their productive hosts is Ayn Rand’s classic novel “Atlas Shrugged.” ...

Producers and Parasites

The idea that there are producers and parasites as expressed in the example above has become a core philosophy of conservatives. They claim that wealthy people "produce" and are rich because they "produce." The rest of us are "parasites" who suck blood and energy from the productive rich, by taxing them. In this belief system, We, the People are basically just "the help" who are otherwise in the way, and taxing the producers to pay for our "entitlements." We "take money" from the producers through taxes, which are "redistributed" to the parasites. They repeat the slogan, "Taxes are theft," and take the "money we earned" by "force" (i.e. government.)

Republican Speaker of the House John Boehner echoes this core philosophy of "producers" and "parasites," saying yesterday,

I believe raising taxes on the very people that we expect to reinvest in our economy and to hire people is the wrong idea,” he said. “For those people to give that money to the government…means it wont get reinvested in our economy at a time when we’re trying to create jobs.”

"The very people" who "hire people" shouldn't have to pay taxes because that money is then taken out of the productive economy and just given to the parasites -- "the help" -- meaning you and me...

So is it true? Do "they" create jobs? Do we "depend on" the wealthy to "create jobs?"

Demand Creates Jobs

I used to own a business and have been in senior positions at other businesses, and I know many others who have started and operated businesses of all sizes. I can tell you from direct experience that I tried very hard to employ the right number of people. What I mean by this is that when there were lots of customers I would add people to meet the demand. And when demand slacked off I had to let people go.

If I had extra money I wouldn't just hire people to sit around and read the paper. And if I had more customers than I could handle that -- the revenue generated by meeting the additional demand from the extra customers -- is what would pay for employing more people to meet the demand. It is a pretty simple equation: you employ the right number of people to meet the demand your business has.

If you ask around you will find that every business tries to employ the right number of people to meet the demand. Any business owner or manager will tell you that they hire based on need, not on how much they have in the bank. (Read more here, in last year's Businesses Do Not Create Jobs.)

Taxes make absolutely no difference in the hiring equation. In fact, paying taxes means you are already making money, which means you have already hired the right number of people. Taxes are based on subtracting your costs from your revenue, and if you have profits after you cover your costs, then you might be taxed. You don't even calculate your taxes until well after the hiring decision has been made. You don;t lay people off to "cover" your taxes. And even if you did lay people off to "cover' taxes it would lower your costs and you would have more profit, which means you would have more taxes... except that laying someone off when you had demand would cause you to have less revenue, ... and you see how ridiculous it is to associate taxes with hiring at all!

People coming in the door and buying things is what creates jobs.

The Rich Do Not Create Jobs

Lots of regular people having money to spend is what creates jobs and businesses. That is the basic idea of demand-side economics and it works. In a consumer-driven economy designed to serve people, regular people with money in their pockets is what keeps everything going. And the equal opportunity of democracy with its reinvestment in infrastructure and education and the other fruits of democracy is fundamental to keeping a demand-side economy functioning.

When all the money goes to a few at the top everything breaks down. Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going.

Democracy Creates Jobs

This idea that a few wealthy people -- the "producers" -- hand everything down to the rest of us -- "the parasites" -- is fundamentally at odds with the concept of democracy. In a democracy we all have an equal voice and an equal stake in how our society and our economy does. We do not "depend" on the good graces of a favored few for our livelihoods. We all are supposed to have an equal opportunity, and equal rights. And there are things we are all entitled to -- "entitlements" -- that we get just because we were born here. But we all share in the responsibility to cover the costs of democracy -- with the rich having a greater responsibility than the rest of us because they receive the most benefit from it. This is why we have "progressive taxes" where the rates are supposed to go up as the income does.

Taxes Are The Lifeblood Of Democracy And The Prosperity That Democracy Produces

In a democracy the rich are supposed to pay more to cover things like building and maintaining the roads and schools because these are the things that enable their wealth. They actually do use the roads and schools more because the roads enable their businesses to prosper and the schools provide educated employees. But it isn't just that the rich use roads more, it is that everyone has a right to use roads and a right to transportation because we are a democracy and everyone has the same rights. And as a citizen in a democracy you have an obligation to pay your share for that.

A democracy is supposed have a progressive tax structure that is in proportion to the means to pay. We do this because those who get more from the system do so because the democratic system offers them that ability. Their wealth is because of our system and therefore they owe back to the system in proportion. (Plus, history has taught the lesson that great wealth opposes democracy, so democracy must oppose the accumulation of great, disproportional wealth. In other words, part of the contract of living in a democracy is your obligation to protect the democracy and high taxes at the top is one of those protections.)

The conservative "producer and parasite" anti-tax philosophy is fundamentally at odds with the concepts of democracy (which they proudly acknowledge - see more here, and here) and should be understood and criticized as such. Taxes do not "take money out of the economy" they enable the economy. The rich do not "create jobs, We, the People create jobs.

May 12, 2011

What can a democracy like ours do when giant companies say, "Rules? We don’t need no stinkin’ rules! We don’t got to pay you no taxes!" and "We will just move out of your puny country if you try to tell us what to do."

Government is beginning to enforce labor laws again, with the National Labor Relations Board (NLRB) filing a complaint against Boeing for retaliating against employees for legitimate union activities. In response Boeing's CEO questions government's "authority" to tell big businesses like Boeing what to do, saying companies like his can just move "overseas." Sarah Palin echoes the complaint, saying businesses can just move to "more business-friendly countries." These are direct challenges to the democracy we fought to build.

“The NLRB is wrong and has far overreached its authority. Its action is a fundamental assault on the capitalist principles that have sustained America's competitiveness since it became the world's largest economy nearly 140 years ago. We've made a rational, legal business decision about the allocation of our capital and the placement of new work within the U.S.”

McNerney essentialy confirms that it was union activity that led Boeing to decide to open a plant in anti-union South Carolina,

“Among the considerations we sought were a long-term "no-strike clause" that would ensure production stability for our customers, and a wage and benefit growth trajectory that would help in our cost battle against Airbus and other state-sponsored competitors. … Union leaders couldn't meet expectations on our key issues, and we couldn't accept their demands that we remain neutral in all union-organizing campaigns…”

Like the movie stereotype, poking his finger in your chest, "You got a problem with that?"

McNerney goes on to call the NLRB enforcement “brazen regulatory activism” that “could accelerate the overseas flight of good, middle-class American jobs.”

There it is, the threat, basically, "We will just move out of your puny country if you try to tell us what to do, and we will take your jobs with us."

Palin explains that business is the boss now, not We-the-People democracy, writing,

Does the President realize the real concern here is not that businesses will choose to locate in one state over another? It’s that businesses will choose to locate in other countries because thanks to the Obama administration’s job killing policies and over-reaching regulatory boards the business climate in the United States is growing toxic.

Basically, she says government ought to just get out of the way of the plutocrats, because big, multinational businesses have so much power over democracy that,

... eventually every state will suffer when businesses declare “enough is enough” with these tactics and decide to relocate in more business-friendly countries.

Once again, the threat: Mess with us and we will leave and take your jobs with us.

Whose Boot Is On Whose Neck?

To be clear, Palin does not mean this as a call to strengthen democracy and get these companies and their threats under control. She is not complaining that these companies do not want to follow our rules and pay decent wages, offer benefits, protect worker safety and protect the environment. She is saying the United States should change and become more "business-friendly" -- like the non-democracies that suppress labor rights, pay low wages, and lock you up if you complain.

"Free Trade" has allowed businesses to cross borders to "business friendly" non-democracies to escape the protections democracy offers us. It pits exploited workers in these "business-friendly" countries against our own democracy-protected workers, forcing a race to the bottom in wages, working standards and living standards. And it lets them avoid taxation, defunding our democracy's ability to enforce regulations and laws

If we don't do what these giant, powerful companies tell us to do, and abandon the protections of democracy that we fought so hard to achieve, they will just pack up and leave and take our jobs with them. Just whose boot is on whose neck?

The question is why do we let them do this, and what can we do about it?

Do We, the People have the ability to enforce our laws? Do we have the power to tax corporations and the wealthy?

Do we have the power to keep the protections and opportunities our democracy had provided?

Democracy provides us with safety protections and fair wages. We fought so hard to build and maintain this democratic society so that We, the People could share the benefits. We passed laws allowing union organizing, as a balance to the immense power of corporations and wealth. We passed laws prohibiting companies from telling workers, "Work for what we give you or don't eat."

And for a time this built our prosperity. But we let the protections slip, and allowed companies to cross borders to escape the protections democracy offers -- to non-democratic countries like China where workers have few rights, where pay is low, environmental protections practically non-existent. Companies locating manufacturing in places like have huge cost advantages over companies located in democracies that respect and protect the rights of citizens.

The Threat Against Us

Won't companies just move out of the state/country if we try to enforce labor laws or tax them? Won't China just stop selling to us or dump our bonds if we apply a tariff to protect democracy, or try to enforce trade laws? Won't the rich just pack up and move or stop working if we don't just give them everything they want? Won't they move even more factories out of the city/state/country if We, the People try to demand our rights?

We Still Have The Power

Here's the thing. We, the People still have some power left in our hands. For one thing we still offer a huge, prosperous market to sell into. We still have the power to make demands on those who would like to sell things to us. We can apply a "democracy tariff" to goods made by exploited workers so these goods do not have a price advantage over goods made here. And we can choose to enforce tax laws, and wage laws, and tariffs, and labor laws, and trade laws to protect and strengthen what remains of our democracy.

When we hear about the deficits we hear a lot of scare stories, which most "serious" media just echo and amplify. The prevailing "serious" narrative we hear is that we must cut entitlements -- any “serious” budget proposal cuts Medicare and Social Security. Even though they just extended tax cuts for the rich the deficits are the worst problem in the world, ever, so we are supposed to be really scared and give in. Seriously.

Polls show that the public wants taxes raised on the rich, cuts in military spending and more & bettter-paying jobs. The public isn't stupid, because it turns out that these are exactly the things that economists say will get us out of the deficits. But raising taxes isn't considered a "serious" deficit-cutting option. Either is cutting military. And to top it off, in DC the idea of creating more and better-paying jobs is so unserious that it isn't even discussed.

Serious Commissions and Gangs Of Negotiators

The public recoils every time politicians get close to reaching their "serious" goal of cutting Social Security or Medicare, instead of raising taxes and cutting military. So the DC elite come up with ways to mask what they are doing : commissions, "triggers," "caps," "across-the-board cuts" all of which avoid actually spelling out that these will cut Social Security and Medicare without touching taxes or military. All the "serious" people favor this approach.

There are so many “serious” reporters and editors and politicians and deficit commissions and negotiators and even “gangs” consist of very “serious” people who come up with these “serious” recommendations.

Who Is At The Table?

These “serious” people who engaged in these “serious” negotiations have something in common. They are almost all very, very well paid, usually white, always DC or Wall Street or big-corporate insiders, always college-educated and comfortable people who work in offices. They do not reflect the diverse makup of the American population. Doing that wouldn’t be “serious,” but it would be ‘small-d’ democratic.

The fact is, the American People just are not reflected "at the table" in these budget negotiations. When you hear about these deficit commissions, discussions, etc. ask yourself: How many make less than $250K? How many are unemployed? How many work taking care of someone else? Who speaks for We, the People in these negotiations?

And ask yourself: What would these deficits talks, commissions, gangs consist of if they were representative of the interests of regular Americans?

What If a Deficit Commission Looked Like America?

If a deficit commission with 100 members had the diversity of the American population "at the table" it would look like this:

19 people on the commission would receive some form of Social Security benefits, 12 of those as retirees. And on this deficit commission they get to talk when the ones making over $250K propose cutting Social Security.

43 of the commission members would have less than $10,000 saved up for retirement. 27 of those less than $1,000.

98 of the 100 members would make less than $250,000 a year.

50 of the members would come from households in which the total income of all wage-earners is less than $52,029.

13 wold have income below the poverty level.

14 members would be receiving food stamps.

16.6% of the commission members would be un- or underemployed, and would be wondering why they are on a deficit commission at all instead of a jobs commission.

The commission would include the right proportion of factory and construction workers, and people who work in a kitchen, and work waiting tables, and teaching, and nursing, and installing tires, and all the other things that people do except, apparently, those on DC elite commissions. (People who do hard, manual labor get an extra vote each on what the retirement age should be.)

74 members would not have college degrees.

20 would not have graduated high school.

18 would speak a language other than English at home.

Have you seen any deficit commissions like that lately? No, seriously, have you?

What does the PUBLIC want?

A "serious" deficit commission in a democracy would come up with deficit solutions that reflect what the public wants. Here are some of the polling results compiled at The American Majority Project Polling:

Social Security & Medicare:

53% support Collecting Social Security taxes on all the money a worker earns, rather than taxing only up to about $107,000 of annual income.

57% oppose raising the retirement age from 66 to 67.

64% oppose spending cuts to Social Security.

82% oppose cutting Social Security benefits in order to reduce the debt.

67% oppose cutting Social Security to make the program more solvent in the long term.

66% support enacting Social Security taxes on wages about $106,800 (the Pay Roll Tax Cap) to make the program more solvent.

74% believe eliminating tax credits for the oil and gas industries to help reduce the budget deficit is mostly or totally acceptable.

68% believe that phasing out the Bush tax cuts for families earning $250,000 per year is mostly or totally acceptable to help reduce the budget deficit.

72% of one group of 512 participants favored raising taxes on people earning more than $1 million a year over cutting important programs once they received details on the impact of the budget cuts. That percentage had been 62% before receiving details of the cuts.

53% believe it is totally or mostly unacceptable to reduce the corporate tax rate from 35% to 25% .

81% support the rights of workers to unionize to negotiate with their employers.

77% believe public employees who belong to a union and work for the state government, city government, or school districts should have the same right to bargain when it comes to their health care, pension and other benefits like those members of unions who work for private companies.

a giant coalition of community, faith, environmental, student, labor, peace, immigration, and other groups are working together to pressure elected officials and the giant corporations and financial institutions who are responsible for the economic crash and the subsequent drop in tax revenues due to straight-up tax evasion.

The Big Banks crashed our economy, destroying jobs, foreclosing on millions of homes and wrecking city and state budgets across the country. After trillions in taxpayer funded bailouts, Wall Street is making billions in profits and giving away record bonuses to CEOs. But our communities are still hurting. Here in New York City, tens of thousands have lost their homes and their jobs. Now, Billionaire Mayor Mike Bloomberg is proposing devastating budget cuts as the only solution to the economic crisis that Wall Street caused. Enough is Enough. On Thursday May 12, 2011 we’ll be bringing some of that spirit of Wisconsin to Wall Street when thousands of people, from all walks of life, converge in a unique and inspiring action in the heart of the financial world – Wall Street. Join us — because it's time to make the Big Banks and Millionaires pay!

May 10, 2011

You have to read The Shock Doctrine to understand what is happening to us. I've said it before but want to say it again. It's really important to read that book.

It explains why we have this phony "crisis" over debt, or public employee pensions, why it is being pushed so hard and being used to scare people so much. It is called "disaster capitalism" and they need people to think there is a disaster before they will except radical changes like getting rid of Medicare, cutting Social Security, getting rid of public-employee unions, etc...

May 9, 2011

Today the US-China Strategic and Economic Dialogue begins in Washington. This is the third such meeting, and it's time for the Obama administration to get it right. China has not been engaging in "trade" with us, they have been engaging in something else entirely.

...It is still holding the renminbi at about 25 or 30 percent below its probable market value. ... Beijing has increasingly used government procurement rules, technical standards and tax laws to force foreign companies to transfer their technology to state-owned Chinese firms in return for access to the Chinese market. ... Beijing’s objective is the mercantilist one of building up state-owned “national champion” firms that can then capture global markets from Japanese, European and U.S. competitors. No matter that the state-owned sector already receives massive official support, direct and indirect — while more efficient private-sector job- creators must scramble for resources.

Since China’s admission into the World Trade Organization we have been packing up our factories and sending them over there. We have been buying so many things made in China, but they have not been buying very many things made here, and the resulting “trade deficit” has gotten worse year after year. Everyone is afraid of what China might do with all those trillion$ in US Bonds they have accumulated. ... There is a better way to solve the problem: let trade BE trade.

Time To Buy From Us

There is a simple solution: tell them to start actually trading with us,

When the meeting begins Secretaries Clinton (State) and Geithner (Treasury) and Locke (Commerce) should slide a big stack of order forms across the table and say, "Your turn. Let us take your orders now, please."

China has been selling but not buying and it's time for them to to start buying. That way we might be able use the word "trade" without wincing. It would also help fix our economy, our budget deficit, our unemployment rate and many other pressing problems.

China Holds $1.5 Trillion Of Our Debt

Trade by definition is a two-way street, buying from and selling to others. But China has accumulated $1.5 trillion by selling to us and not buying from us. This one-sided “trade” relationship has hurt or killed industries, companies, factories and jobs here in the United States, while forcing wages and living standards to drop. It has also placed China in an unhealthy position of power over us.

It is understandable that some American interests have benefited from this arrangement, becoming fabulously wealthy while at the same time strengthening their whip-hand by pitting China's low-wage rights-suppressed workers against American employees who have enjoyed all the protections and benefits of democracy. But it is not clear why our own government has gone along. It is obvious now to all that the one-way arrangement with China has hurt us, closed our factories, devastated our "rust-belt" communities, created vast income disparities and created terrible imbalances in the world's economy.

Placing Orders Here Fixes Both Economies

If China were to place orders tomorrow for $1.5 trillion in American-made goods, the effect on our economy, unemployment level, manufacturing base, budget deficit, state budget shortfalls, public-employee pensions, and a host of other problems would be immediate and dramatic.

And with our economy and wages restored, our own orders of goods from China would increase, boosting their economy, too. Their trade manipulations are costing them. Workers, facing labor-rights suppression and import restrictions from joining the world's economy, are increasingly restless. They face inflation and a pending financial crisis. And that huge cash reserve is increasingly at risk from the worldwide imbalances it causes. If China repositioned its policies from mercantilism to trade it would fix so many problems. So why don't they?

If Not Trade, What?

If China were using trade to build their economy they would use that $1.5 trillion dollar reserve to place orders here for American-made goods, boosting our economy, and boosting our ability to trade further with them. But they are not. They are sacrificing their own economic position to instead build their power position.

China is cleverly using the greed and power of our Chamber of Commerce, huge multinationals, Wall Street, etc, to manipulate our government into letting them to sell China the rope to hang us with. The more China continues these manipulations even at its own expense, the more we should perhaps be understanding these imbalances as a national security problem instead of a trade problem.

China isn't trading, it is seizing the means of production. It is using manipulations of trade to gather wealth and power to itself at the expense of the rest of the world. It is vitally important for US opinion leaders and policymakers to address this. We have been hypnotized by the word "trade" and the result is we are ignoring our national security. We are not minding our business.

It is time to tell them to start trading fair or we'll start minding our business with a big, fat tariff on imports so we can start paying down our deficits and rebuilding our manufacturing and jobs base.

China's Vice Finance Minister lectured US administration officials about our debt and told us to mind our own business when it comes to China's currency manipulation. It is about time the United States started minding our own business by taking steps to protect our business and bring manufacturing and jobs back home.

“We are paying close attention to the domestic discussion in the U.S. on debt and deficits,” Zhu told reporters in Beijing today. “We hope the U.S. can take effective measures toward fiscal reorganization just as President Obama suggested.”

[. . .] Zhu also said that currency policy is the “sovereign right” of every country.

China says currency manipulation is their "sovereign right." They say we should mind our own business. But they insist that "free trade" means America does not have a right to mind our own business and protect our own workers, companies and jobs.

It's Time To Mind Our Own Business

It is time to finally mind our business and take action. For decades the United States has refused to mind our business by pursuing "free trade" policies that allow other countries to engage in all kinds of trade schemes, while we just sit back and let them. Our leaders have not protected American workers, companies and jobs, instead sending them out of the country. We are told that the resulting "low prices" at Wal-Mart justify letting manufacturing move out of the country,

It is time for us to mind our business, and engage in our own sovereign duty to protect American companies, workers and jobs from the trade manipulations and schemes others engage in. It is time to hold countries like China and Germany accountable for the damage done to our businesses by their mercantilist trade policies. Trade barriers, currency manipulation, even outright extortion - demanding that our companies transfer proprietary technologies and processes if they want to do business selling into other countries - has cost us factory after factory, job after job and company after company.

In other words, the current situation is one-sided. Our markets are open to Colombia products, but barriers exist to make it harder to sell American products in Colombia.

I think it makes sense to remedy this situation.

President Bush wasn't saying he was going to do something about the one-sided arrangement and hold Columbia accountable, he was saying that since we just let Columbia do this to us, therefore we need to reward them with a free-trade treaty that gus American jobs even more! But why not just mind our business and stop it? All we really have to do is tell Columbia we are going to do what they do, until they stop doing that, start paying workers a decent wage and protecting their safety and rights.

Why China Really Cares

The fearmeisters say China is concerned that we might not meet our debt obligations. This is not at all what China is concerned about. China holds $1.15 trillion in Treasuries, accumulated as they sell goods to us, and don't let us sell goods to them. What they are concerned about is that our currency might drop, which will help bring factories and jobs back to America. From the Bloomberg story,

“Reduced U.S. fiscal spending may lead to a higher possibility of the U.S. dollar appreciation, therefore it helps China to maintain the value of the U.S. debt it holds,” said Li Jun, a Shanghai-based strategist at Central China Securities Holdings.

Their concern about our debt is really just about keeping their currency low, which gives goods made in China a huge price advantage in world markets.

Let Trade Be Trade

It is time to mind our business and mind our businesses. It is time to take action on mercantilism and currency manipulation. It is time to stop China and others from flooding our markets with goods made without the wage, safety and environmental protections that democracy provides.

Let trade be trade. Trade is supposed to be about trading. It is not supposed to just be a scheme to drive wages and living standards down by packing up factories and moving them across borders. It is not supposed to be "take a pay cut and a cut in benefits or we'll move your job." It is not supposed to be "well, we have something called globalization now so everyone should expect to be poorer and poorer every year."

Trade is supposed to be we buy what they make and they use the money we pay them to buy things we make. And then we use the money they paid us to buy things made there. And then they use the money we paid them to buy things made here. It is supposed to go on like that, and everyone does better and better. Better and better, not poorer and poorer.

It really is time to mind our own business and tell countries that can't sell to us until they meet our conditions. Which is just what they do to us.

Just then the Cato Institute Caterpillar - the Cato-Pillar - appears before you, sitting on an ornate toadstool built by generous corporate donors. Beside him is the Mad Hatter, er, the Bad Tanner, we mean, the "Tan Boehner" - with a pricetag on his hat that reads "Citizens United."

Ahem, they say. We think buses and subways are too expensive, don't you? So we're taking them away.

But, you ask, why not just fix what makes them expensive?

You'll like this better, they say. A bus or subway ride costs $2.50. Soon it'll cost $5.00. That's too much,don't you think? So we'll just give you $2.50 instead.

But how will I get to school? you ask. How will my parents get to work?

Ah, they say. There will be taxis. Wonderful, wonderful taxis. Taxis that aren't owned and operated by the evil government.

May 5, 2011

Since China’s admission into the World Trade Organization we have been packing up our factories and sending them over there. We have been buying so many things made in China, but they have not been buying very many things made here, and the resulting “trade deficit” has gotten worse year after year. Everyone is afraid of what China might do with all those trillion$ in US Bonds they have accumulated. We are told to be afraid, that we need to cut Medicare and Social Security and unemployment benefits and all the other things We, the People do for each other, and learn to be poor. There is a better way to solve the problem: let trade BE trade.

Trade Should BE Trade

Trade is supposed to be about trading. It is not supposed to just be a scheme to drive wages and living standards down by packing up factories and moving them across borders. It is not supposed to be "take a pay cut and a cut in benefits or we'll move your job." It is not supposed to be "well, we have something called globalization now so everyone should expect to be poorer and poorer every year."

Trade is supposed to be we buy what they make and they use the money we pay them to buy things we make. And then we use the money they paid us to buy things made there. And then they use the money we paid them to buy things made here. It is supposed to go on like that, and everyone does better and better. Better and better, not poorer and poorer.

When the meeting begins Secretaries Clinton (State) and Geithner (Treasury) and Locke (Commerce) should slide a big stack of order forms across the table and say, "Your turn. Let us take your orders now, please."

That is what China can do with all of those US Bonds they have been accumulating. They can start trading, which means buying things from us. And we should say that those things should be things, not companies or farms or real estate or more factories. Our government should make it clear that it is their turn. It is time for trade to BE trade. And if not, we will put a big tariff on goods made in China until it is.

The main unfair tactics China uses to its advantage:
1) Currency manipulation. China "pegs" its currency at a very low, or "weak" rate, so goods from China cost up to 40% less than they otherwise should.
2) Labor-rights suppression, which has lowered manufacturing wages of Chinese workers by 47% to 86%.
3) Massive direct government subsidization of export production in many key industries.
4) Environmental degradation that ends up affecting all of us.
5) Intellectual property theft and piracy, which mean that American products that could be sold are stolen instead.
6) A number of policies that block U.S. firms from market access.

It is necessary to bring their currency to market rates, but this is not all that must be done to bring trade into balance. It helps; it doesn’t fix it.

Do What They Do

In our scenario our administration has handed a stack of order forms to the Chinese delegation, and said, "We're ready to take your order now." Tell them the deal for cashing in those bonds -- and continuing to sell to us without big tariffs -- is that China has to actually trade with us, and spend all of those accumulated bonds on goods made here. (I guess if they can tell Social Security recipients that their bonds have been spent they can set conditions on China cashing in theirs... right?)

We don't make that here anymore, you say? Well, here is a solution to that, too. We can just do what they do. We can say, you have to build a plant here that does that. And you have to "partner" with an American company before you can even do that. And you have to transfer your technology to that company. And after a few years your company goes away and the factory and the technology and the market will be ours.

Believe it or not, that is what they say to our companies, and for far too long our government has let them get away with that. So along with the stack of order forms, they can tell China that we are going to start doing what they do. Go down the above list, point by point, and just do what they do. Leave out the labor-suppression and environmental degradation parts.

We Can't Just Go Back To The Old Way

There are huge interests here and in China who have done very well because of the "trade" policies of recent years. With the economic crisis heading into the past they are pushing very hard to just go back to the way things were. Of course they are. And they are very, very powerful. The Chamber of Commerce runs hundreds of millions of dollars of campaign ads urging us to just go back to doing the things that brought them so much wealth and power. In China those who accumulated great wealth and power from these schemes are fighting hard to just keep it going. The imbalances have been just great for them, and they use the resulting wealth and power to push for more.

But the resulting imbalances have been terrible for everyone else in the world. The imbalances have drained wealth and power from everyone else in the world. Can everyone else in the world overcome this or are we all helpless against the onslaught?

Or do we have to wait for the next crisis to completely destroy everything and rebuild from there?

Congressional Democrats yesterday unveiled the Make It In America plan for the 112th congress. This is a set of specific, detailed, targeted bills that clearly create jobs and restore our economic competitiveness, beginning with a national strategy for manufacturing. This is very different from the vague, sloganeering, lobbyist-written plan offered by Senate Republicans.

Yesterday House Democratic Whip Steny Hoyer and Minority Leader Nancy Pelosi unveiled their Make It In America plan “to support job creation today and in the future by encouraging businesses to make products and innovate in the US and sell it to the world through strengthening our infrastructure and supporting investments in key areas like education and energy innovation.”

This Make It In America initiative involves a series of bills that have been introduced for consideration by the 112th Congress. This initiative will create jobs here, grow the economy and reduce the trade deficit, all of which help reduce our budget deficits. Creating jobs and growing the economy reduces deficits by increasing tax revenues and decreasing spending on unemployment benefits, food stamps, etc.

Some of the Make It In America bills are:

Currency Reform for Fair Trade Act (Reps. Levin and Tim Ryan, H.R. 639):Levels the trade playing field by holding accountable countries that create an unfair trade advantage by manipulating their currency.

National Manufacturing Strategy Act (Rep. Lipinski, H.R. 1366): Directs the president to work with industry, labor leaders, and other stakeholders to develop a national strategy to increase manufacturing.

Build American Jobs Act (Rep. Levin, H.R. 922): Build America Bonds to Create Jobs Now Act (Rep. Connolly, H.R. 11): Extends the Build America Bonds program, provides additional funding for the Recovery Zone bonds program, and makes improvements to existing bond and credit programs to help states and local governments leverage private capital to create jobs today and build the infrastructure that is the backbone of future economic growth.

National Infrastructure Development Bank Act (Rep. DeLauro, H.R. 402): Establishes a wholly-owned government corporation to facilitate efficient investments in and financing of infrastructure projects—from leading-edge broadband networks and energy delivery systems to modern ports—that foster economic development and keep America competitive.

Build a 21st Century Surface Transportation System: Enact a Surface Transportation Authorization bill to create a modern and efficient transportation system that facilitates trade and industry.

Workforce Investment Act: Our economy is only as strong as the people who work to grow it. The American workforce investment system is supported by a partnership of educators, workforce development professionals and the business community who work together to ensure the vitality of local economies. A robust reauthorization of WIA will ensure that workers who seek opportunities in a new field or new opportunities within their own field have the support they need.

The Keep American Jobs from Going Down the Drain Act (Rep. Sutton, H.R. 1684): Gives preference to U.S.-made goods and materials for use in the installation, replacement, and improvement of drinking water and wastewater infrastructure projects.

There are clean energy manufacturing, energy efficiency and alternative energy bills, as well.

Specifics, Plans, Details

This is not a vague set of platitudes and lobbyist-written slogans (see below). These are several specific, targeted bills that create jobs and fix problems that have hindered and are hindering job grown and competitiveness.

And today in a formal unveiling of the plan for the 112th Congress, Hoyer said,

"The Make It In America agenda is about investing in this country’s proud tradition of making things. Make It In America means creating the conditions for companies to make products here, innovate here, and hire workers here—and the conditions for America to have the best-trained workforce in the world. This agenda is founded on the conviction that when we make more products in America, more families will be able to Make It In America, as well.

The Republican Plan

Senate Republicans Tuesday released their own plan. Apparently transcribed from a Chamber of Commerce lobbyist memo of slogan suggestions, they say their plan will boost the economy. See if you can guess what their plan is. Hint: the same plan that "boosted the economy" from 2001-2009: tax cuts for the rich, get rid of unions, get rid of consumer and employee protections and other points that led to a decade of no job growth, low economic growth, wage decline, corruption, concentration of income at the very top and culminated in a financial collapse that brought the world's economy down and left us with extreme unemployment and trillion-plus deficits. They have a Seven-Point-Plan to do all that again, but more.

Here is the Seven-Point-Plan, translated from lobbyist wording to regular English:

Cut taxes for the rich

Cut regulations that protect consumers, employees and the environment

Cut spending on the things We, the People (government) do for each other, including spending on infrastructure and education

Get rid of unions

More trade agreements to increase offshoring

Unleash oil companies to do whatever they want, including more unregulated drilling in the Gulf of Mexico

Block citizen access to courts for redress when corporations harm them

The Hill's Brent Budowsky, in Made in the USA, says we need a Make It In America movement,

Let’s begin a national wave movement for Americans to buy American products, sold by American companies, made by American workers, to create American jobs and lift the American economy.

Tired of high unemployment, exported jobs, big deficits and low wages? Here is the answer. Let’s kick some butt, take some names, wave some flag and rise as a nation to buy some products made by red, white and blue American workers!

Throughout the land there is a fervent patriotism waiting to be tapped and a patriotic capitalism waiting to be born to lift the nation and mobilize Americans, from Tea Party voters to union workers, from the inner-city poor to rural America, from small businesses to American women and our veteran heroes.

The National Labor Relations Board (NLRB) is engaging in legal action against Boeing and is threatening to sue Arizona, South Carolina, South Dakota, and Utah for anti-union activities. It has been so long since the NLRB was willing and able to engage on the side of working people and the law that corporate conservatives that we even have laws to protect workers from anti-union activities. In response corporate/conservative heads are exploding in shock.

Boeing

Boeing opened a 787 assembly line in "right-to-work" South Carolina, after repeatedly having to grant concessions to union workers in Washington State. Opening an assembly line is not illegal, of course, but doing so in retaliation for union activities or for the purpose of threatening a union is. The key to the NLRB action is that Boeing executives said they were opening the South Carolina plant because of union activities.

The International Associaltion of Machinists and Aerospace Workers complaint states that a Boeing executive, on a quarterly earnings call with reporters and analysts stated Boeing was "diversifying Boeing's labor pool" to South Carolina due to "strikes happening every three to four years." The complaint cites several other instances of Boeing officials stating the reason for opening the South Carolina assembly line was because of union activities, as well as threatening the union with losing work in Washington state because of union activities.

The actions by Boeing as stated in the complaint are illegal. You might not even believe they are illegal because it has been so long since these laws were enforced. But American law actually protects workers from coercion by big corporations.

States

Arizona, South Carolina, South Dakota, and Utah have enacted constitutional amendments prohibiting workers from forming unions using "card check." Card check is when a majority of workers sign a card stating that they want a union. The NLRB is threatening to sue these states because the state amendments are pre-empted by the supremacy clause of the US Constitution, so they can't prohibit workers from forming unions this way.

Corporate-Conservative Reaction

Corporate conservatives fear that their power is threatened if the country returns to actual enforcement of our laws. So they are coming up with ways to claim this is "big government" conducting a "job-killing" "war on job creators," working with "union bosses" to "dictate" to businesses what they can and cannot do to keep "union thugs" from "intimidating" workers who just want to be left along and don't want to ask for good wages, benefits, vacations, sick pay, safety protections and all the terrible things that union representation brings. In other words, the usual nonsense. Don't fall for it.

Do We, the People have the ability to enforce our laws? Do we have the power to tax corporations and the wealthy?

Do we have the power to protect the protections of democracy?

Democracy provides workers with safety protections and fair wages. We fought so hard to build and maintain this democratic society so that We, the People could share the benefits. We passed laws allowing union organizing, as a balance to the immense power of corporations and wealth. We passed laws prohibiting companies from telling workers, "Work for what we give you or don't eat."

And for a time this built our prosperity. But we let the protections slip, and allowed companies to cross borders to escape the protections democracy offers -- to non-democratic countries like China where workers have few rights, where pay is low, environmental protections practically non-existent. Companies locating manufacturing in places like have huge cost advantages over companies located in democracies that respect and protect the rights of citizens.

The Threat Against Us

Won't companies just move out of the state/country if we try to enforce labor laws or tax them? Won't China just stop selling to us if we apply a tariff to protect democracy, or try to enforce trade laws? Won't the rich just pack up and move or stop working if we don't just give them everything they want? Won't they move even more factories out of the city/state/country if We, the People try to demand our rights?

We Still Have The Power

Here's the thing. We, the People still have some power left in our hands. For one thing we still have a huge market. We still have the power to make demands on those who would like to sell into that market. And we can still choose to enforce tax laws, and wage laws, and tariffs, and labor laws, and trade laws to protect and strengthen what remains of our democracy.

But we can only do this if we decide to stand up for ourselves and do something about what is happening. We have to put our foot down, and demand that our politicians listen to We, the People and do what we say. It is time to get organized, to talk to neighbors and relatives, to show up at town hall meetings and protests. We can demand that news media begin to cover more than just the corporate/conservative viewpoint. We can go out and register others to vote, and get them to the polls, and demand that votes be counted accurately. We can take back our democracy and put We, the People back in charge.

May 3, 2011

Unneeded as workers, the unemployed also become superfluous as consumers and burdensome as citizens.

We CAN fight this, but we have to remember who "We, the People" are. We have to remember WE are supposed to be in charge here, and do something about it. We are the people in charge, not a burden, in the way of profits.